Cyprus’ cabinet approved the €11.1 billion state budget for 2027 on Wednesday, with Finance Minister Makis Keravnos forecasting continued economic growth, full employment and a higher fiscal surplus.

The 2027 budget is around €470 million higher than the budget approved for 2026 and will be submitted to the House of Representatives for approval in December.

Keravnos said the government was presenting a balanced and development-oriented budget, with the economy expected to continue expanding despite the uncertain international environment.

“Growth in 2027 is expected to be around 2.9 per cent,” Keravnos said, adding that there were encouraging indications that the rate could exceed 3 per cent.

He also said unemployment was expected to remain at current full-employment levels, with the rate continuing to trend downwards.

The government expects Cyprus to maintain a substantial fiscal surplus in 2027, with the fiscal balance projected to reach 2.8 per cent of gross domestic product, up from 2.3 per cent in 2026.

The primary balance, which excludes interest payments on government debt, is forecast to reach 4 per cent of GDP, compared with 3.6 per cent this year.

Keravnos also addressed inflation, saying that the outlook would be directly affected by fuel prices.

“The estimate puts inflation at around 4 per cent,” he said, referring to the government’s projection.

The budget will now proceed to parliament, where MPs are expected to debate and vote on the government’s spending plans in December.